The Organization for Economic Cooperation and Development announced some new steps that the international community is taking toward automatic exchange of tax information between governments worldwide and published ratings of how well countries are complying with demands for greater transparency.
Members of the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes took significant steps during a meeting last Thursday and Friday in Jakarta, Indonesia to implement a global call for greater international cooperation against tax evasion. The Global Forum brings together 121 countries and jurisdictions, including the United States, for wide-ranging discussions on transparency and exchange of information for tax purposes.
The actions taken include publication of new compliance ratings for 50 countries and jurisdictions on practical implementation of the Global Forum’s information exchange standard. Eighteen jurisdictions were rated as compliant, 26 as largely compliant, two as partially compliant and four jurisdictions as non-compliant, including the British Virgin Islands, Cyprus, Luxembourg and the Seychelles. Fourteen other countries were not given compliance ratings, pending further improvements to their legal and regulatory frameworks for exchange of information in tax matters. They included Botswana, Brunei, Dominica, Guatemala, Lebanon, Liberia, Marshall Islands, Nauru, Niue, Panama, Trinidad and Tobago, United Arab Emirates and Vanuatu. Switzerland was rated as conditional.
In addition, members of the Global Forum established a new Automatic Exchange of Information Group, which will be open to all interested countries and jurisdictions, to prepare the move towards implementation of automatic exchange of tax information. Italy was elected chair of this group.
The members of the Global Forum also agreed to do further work to strengthen the definition of beneficial ownership and the availability of this type of information. They also agreed that the Global Forum will continue monitoring implementation of the transparency and information exchange standard, while further developing its Terms of Reference and review processes.
Its sixth meeting, the Global Forum attracted more than 200 delegates from 86 member jurisdictions and 11 international organizations. During the Jakarta meeting, six new countries—Azerbaijan, Dominican Republic, Lesotho, Romania, Senegal and Ukraine—became members.
“At a time where most economies are extremely fragile, having so many jurisdictions working together and agreeing on very sensitive outcomes to improve international tax cooperation is key and extremely positive,” said Dr. Muhammad Chatib Basri, Minister of Finance of Indonesia, in a statement congratulating members of the Global Forum. “I have no doubt that this is the kick-off to a new era in the global tax environment."
The Global Forum works through a peer review process to assess the adequacy of its members’ legal and regulatory framework for exchange of information in tax matters (known as a Phase 1 review) as well as the application of this framework (referred to as a Phase 2 review). To date, 124 peer reviews have been completed, including 50 Phase 2 reviews.
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